Question 1

All of the following can be used to increase monopoly power except

Accepted Answer

A)   Acquisitions.
B)   Lawsuits.
C)   Antitrust laws.
D)   Discounts for customer loyalty.

Question 2

Google is currently being investigated by

Accepted Answer

A)   The European Antitrust Authority.
B)   The U.S. Justice Department.
C)   Intel corporation.
D)   The FTC.

Question 3

A monopolist with the ability to use price discrimination produces more to maximize profit than it would if it could charge only one price.

Accepted Answer

A) True 
 B)False

Question 4

Suppose a monopoly concrete contractor builds 20 driveways per month for $10,000 each. In order to increase sales to 21 driveways, the contractor must lower the price of driveways to $9,500. The marginal revenue of the 21st driveway is

Accepted Answer

A)   $500.
B)   $199,500.
C)   -$500.
D)   $9,500.

Question 5

Market power is

Accepted Answer

A)   A characteristic of all market structures.
B)   The ability to alter the market price of a product.
C)   Most common for competitive firms.
D)   Enjoyed by all firms at high levels of output.

Question 6

Antitrust laws can restrain the abuse of monopoly power.

Accepted Answer

A) True 
 B)False

Question 7

Google holds market power by all of the following strategies except

Accepted Answer

A)   Purchasing rivals.
B)   Low pricing.
C)   Exclusive dealings with advertisers.
D)   Elimination of search results for competitors.

Question 8

In Table 24.1, using the profit maximization rule, a monopolist that is able to practice price discrimination will charge

Accepted Answer

A)   A price of $450.
B)   A price of $400.
C)   A price of $500.
D)   Different prices to different customers. D

Question 9

The Microsoft Corporation was sued by the government for all but which one of the following antitrust violations?

Accepted Answer

A)   Discouraging computer manufacturers from installing any operating system other than Microsoft's.
B)   Buying out potential competitors.
C)   Bundling software.
D)   Stealing competitors' secrets. D

Question 10

A monopoly

Accepted Answer

A)   Maximizes profits at the output level where P = MC.
B)   Is one of many sellers in a given market.
C)   Charges higher prices than competitive firms, ceteris paribus.
D)   Maximizes profits at the output level where P = MR.

Question 11

An In The News article titled "Ticketmaster Rolls Out Dynamic Pricing" indicates that Ticketmaster

Accepted Answer

A)   No longer has a monopoly on online ticket ordering.
B)   Was broken into two separate companies because of its monopoly position.
C)   Will lower ticket prices on all events.
D)   Will allow seats at certain events to be priced by supply and demand.

Question 12

A monopoly can have a high degree of market power because of all but

Accepted Answer

A)   Control over key inputs.
B)   Government-bestowed franchise rights.
C)   A downward-sloping demand curve for its product.
D)   The presence of many close substitutes for its product.

Question 13

If the entire output of a market is produced by a single seller, the firm

Accepted Answer

A)   Is a monopoly.
B)   Faces perfectly inelastic demand.
C)   Can charge any price it wants and not lose customers.
D)   Is producing a new product.

Question 14

Which of the following is not an example of price discrimination by the only movie theater in town?

Accepted Answer

A)   Charging a lower price for children under the age of 12.
B)   Charging a lower price for matinees.
C)   Charging a lower price for people over the age of 65.
D)   Charging one price at all times for all customers.

Question 15

Which of the following is the same for monopoly and competition under the same cost and demand conditions?

Accepted Answer

A)   The amount of output that is produced.
B)   Economic profits.
C)   The goal of maximizing profits.
D)   Efficiency of production at the profit-maximizing output.

Question 16

Price discrimination is best defined as

Accepted Answer

A)   Charging an excessive price for a product.
B)   The charging of different prices by different companies for the same product.
C)   The selling of an identical good at different prices to different consumers by a single seller.
D)   The selling of differentiated goods to consumers at different prices.

Question 17

In the long run, a monopolist can continue to earn economic profits.

Accepted Answer

A) True 
 B)False  True

Question 18

Lawsuits can act as a barrier to entry in monopoly markets.

Accepted Answer

A) True 
 B)False

Question 19

The marginal revenue of a monopolist falls below price because the firm

Accepted Answer

A)   Is not limited by market demand.
B)   Faces a market demand curve that is inelastic.
C)   Confronts a downward-sloping demand curve.
D)   Has an upward-sloping marginal cost curve.

Question 20

2? A)  The price elasticity is elastic. B)  The price elasticity is unitary. C)  The price elasticity is inelastic. D)  The price elasticity is zero." class="answers-bank-image d-inline" rel="preload" > Refer to Figure 24.3. Which of the following statements is true about the price elasticity of demand at price P2?

Accepted Answer

A)   The price elasticity is elastic.
B)   The price elasticity is unitary.
C)   The price elasticity is inelastic.
D)   The price elasticity is zero.

Exam 10: Self-Adjustment or Instability

All of the following can be used to increase monopoly power except

Correct AnswerverifiedShow Answer

Google is currently being investigated by

Correct AnswerverifiedShow Answer

A monopolist with the ability to use price discrimination produces more to maximize profit than it would if it could charge only one price.

Correct AnswerverifiedShow Answer

Suppose a monopoly concrete contractor builds 20 driveways per month for $10,000 each. In order to increase sales to 21 driveways, the contractor must lower the price of driveways to $9,500. The marginal revenue of the 21st driveway is

Correct AnswerverifiedShow Answer

Market power is

Correct AnswerverifiedShow Answer

Antitrust laws can restrain the abuse of monopoly power.

Correct AnswerverifiedShow Answer

Google holds market power by all of the following strategies except

Correct AnswerverifiedShow Answer

In Table 24.1, using the profit maximization rule, a monopolist that is able to practice price discrimination will charge

Correct AnswerverifiedD

The Microsoft Corporation was sued by the government for all but which one of the following antitrust violations?

Correct AnswerverifiedD

A monopoly

Correct AnswerverifiedShow Answer

An In The News article titled "Ticketmaster Rolls Out Dynamic Pricing" indicates that Ticketmaster

Correct AnswerverifiedShow Answer

A monopoly can have a high degree of market power because of all but

Correct AnswerverifiedShow Answer

If the entire output of a market is produced by a single seller, the firm

Correct AnswerverifiedShow Answer

Which of the following is not an example of price discrimination by the only movie theater in town?

Correct AnswerverifiedShow Answer

Which of the following is the same for monopoly and competition under the same cost and demand conditions?

Correct AnswerverifiedShow Answer

Price discrimination is best defined as

Correct AnswerverifiedShow Answer

In the long run, a monopolist can continue to earn economic profits.

Correct AnswerverifiedTrue

Lawsuits can act as a barrier to entry in monopoly markets.

Correct AnswerverifiedShow Answer

The marginal revenue of a monopolist falls below price because the firm

Correct AnswerverifiedShow Answer

Refer to Figure 24.3. Which of the following statements is true about the price elasticity of demand at price P2?

Correct AnswerverifiedShow Answer

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D

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D

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True

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Refer to Figure 24.3. Which of the following statements is true about the price elasticity of demand at price P₂?

Correct Answer
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